Government set to privatise housing associations to wipe state debt and encourage building

Sajid Javid slams Donald Trump
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Ella Wills16 November 2017

Housing associations are to be made private in a bid to encourage the building of more homes, new Government plans have revealed.

Cabinet minister Sajid Javid will announce a move away from treating associations as public bodies, saying it will enable them to borrow more money and "build more homes", the Financial Times reported.

Not-for-profit organisations have been constructing more homes in recent years and there are reportedly expected to be 65,000 new properties in 2018.

But experts warned that the change would not necessarily mean housing associations increase the construction of homes, the newspaper reported.

They said that the UK needs to build up to 300,000 homes a year to fix the housing crisis. Around 170,000 were completed in 2016.

Theresa May: 'I have made it my mission to build the homes the country needs' 
AFP/Getty Images

Theresa May is setting out plans to take "personal charge" of the housing crisis.

On Thursday, she will say: "I have made it my mission to build the homes the country needs and take personal charge of the Government's response."

Her comments come as Mr Javid prepares to announce that the Government is removing housing associations' debt, giving them a stable investment environment to fund new homes.

Mr Javid will say the Government's housing white paper identified the scale of the problems in the property market and set out a course of action.

"But there are many, many faults in our housing market, dating back many, many years," he will say. "If you only fix one you'll make some progress, but not enough. This is a big problem and we have to think big."

Chancellor Philip Hammond has hinted at help for first-time buyers in his November 22 Budget, but warned there was no "silver bullet" that would fix the housing market.

By reclassifying house associations as private organisations, more than £60 billion of debt will be removed from the state balance sheet, according to the Financial Times.

The debts of housing associations were private until they were reclassified as public bodies in 2015 by the Office for National Statistics

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